Anchor investors would receive a part of the IPO. In addition, policyholders would be entitled to up to 10% of the LIC IPO offering size. According to individuals familiar with the situation, the state-owned insurance behemoth Life Insurance Corporation of India (LIC) gained approval from capital markets regulator Sebi on Tuesday to generate capital through an initial share sale.
The government was hoping to raise Rs 63,000 crore by selling a 5% share in the life insurance company in order to reach its Rs 78,000 crore disinvestment target for the current fiscal year.
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The IPO is a Government of India offer for sale (OFS), and LIC will not be issuing any new shares. In LIC, the government owns a 100% ownership, or around 632.49 crore shares. The face value of each share is Rs ten.
The LIC public offering would be the largest in Indian stock market history. When LIC gets listed, its market value will be comparable to that of leading firms such as RIL and TCS.
The sum highlighted by Paytm’s IPO in 2021 was the biggest ever, at Rs 18,300 crore, followed by Coal India (2010), which raised roughly Rs 15,500 crore, and Reliance Power (2008), which brought Rs 11,700 crore.
The embedded value of LIC was calculated by actuarial firm Milliman Advisors LLP India, and pre-IPO transaction advisors Deloitte and SBI Caps were appointed.
What is Life Insurance Company (LIC)?
The Life Insurance Corporation of India (LIC) is a statutory insurance and investment company with its headquarters in Mumbai, India. It is owned by the Government of India’s Ministry of Finance.
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The Life Insurance Corporation of India (LIC of India) was founded on September 1, 1956, when the Indian Parliament passed the Life Insurance Corporation of India Act, which nationalised the Indian insurance business. The state-owned Life Insurance Corporation of India was formed through the merger of over 245 insurance companies and provident societies.
The Life Insurance Corporation of India had a total life fund of 28.3 trillion rupees as of 2019. In the 2018–19 fiscal year, the total value of sold insurance was $21.4 million. In the fiscal year 2018–19, the Life Insurance Corporation of India satisfied 26 million claims. Its policyholders number 290 million.
